BHP Billiton has settled upon B&A Mineracao as its preferred interested party to buy its stake in Guinea’s Mount Nimba iron ore deposit, with exclusive negotiations set to commence.

The companies are currently considering the conditions which would surround the potential exclusive negotiations, sources told Reuters.

“BHP will enter exclusive negotiations with B&A to sell its slice in Mount Nimba and its smaller iron ore assets in Liberia,” the source divulged.

Should the sale of BHP Billitong’s stake in Mount Nimba go ahead, there has been speculation that the value of the deal would be between $500 million and $600 million – given that the Mount Nimba deposits are the most extensive deposits in Guinea.

BHP Billiton currently owns a 40 percent stake in the Mount Nimba deposits, while gold miner Newmont owns a further 40 percent. The two companies are reportedly in the process of buying out a third stake-holder, Areva, in a deal which would see both parties own a 50 per cent stake.

Guinea – and the West African region at large- was pinpointed a number of years ago as a hotspot for potential mining activities by the world’s biggest mining operators, including Brazil’s Vale, alongside BHP and others.

However, since the wide-spread mining entry into Guinea, progress has been limited and development of mining infrastructure slow, prompting BHP Billitong’s decision to divest of its interests in Guinea, casting doubt over Guinea’s actual potential in production terms.

B&A were one of a number of bidders interested in buying BHP’s stake, with the main other rival being the world’s biggest steel producer ArcelorMittal.

B&A is the project of ex- Vale chief executive Roger Agnelli, who founded the company in conjuction with investment banking group BTG Pactual.